KERLINK (EPA:ALKLK) - Third-quarter 2020 revenue

Transparency directive : regulatory news

22/10/2020 17:45

Third-quarter 2020 revenue:

                 Gradual recovery in business activity
         Limited revenue drop: -7% (vs. -38% in second-quarter 2020)
     Business activity on the rise for private operators +2% vs. Q3 2019
                      International revenue up 10%

PRESS RELEASE

Thorigné-Fouillard, 22 October 2020, 5.45 p.m.

Thorigné-Fouillard, France - Kerlink (ALKLK - FR0013156007), specialising in
network and IoT solutions, published its third-quarter 2020 revenue today.

Revenue by business line    Q3    Q3            At 30     At 30
In thousands of euros      2020   2019 Change September September  Change
                                                2020      2019
Historic and
alternative
telecom operators            452   692   -35%   1,187     1,795   -34%
Private network operators  2,228 2,186    +2%   6,090     7,366   -17%
Reference design              41    49   -16%     210       227    -7%
Total                      2,721 2,927    -7%   7,487     9,389   -20%

After falling 38% in Q2 2020, revenue posted a weaker year-on-year decline of
7% in Q3 2020 to EUR2.7m, an encouraging trend that underscored the gradual
recovery of business activity despite the persistently uncertain state of the
ongoing health crisis.

The private operators segment, up 2%, generated more than 80% of business over
the period and reiterated its strong momentum.

International sales picked up 10%, now accounting for over half of revenue in
the third quarter (52%).

At 30 September 2020, cumulative sales for the first nine months of the year
amounted to EUR7.5m, down 20% (vs. -26% at the end of H2 2020).

Private network operators back on the growth track
The strategy for expanding the network of partners, ramped up early in the
year, has begun to pay off with the signing of multiple new contracts in FY
2020.
These partners market our IoT solutions to private operators, accelerating
their market penetration and adoption in dynamic geographic areas or in the
three major areas targeted by the Group:

o Smart Cities: combining multiple market segments such as smart metering,
  smart parking, street lighting, waste management, air quality & pollution,
  smart building & facilities, assets monitoring, etc.
o Smart Industries: fleet & asset tracking, smart energy & utilities, oil, gas
  & mining, airports, harbors, infrastructures, manufacturing, retail, etc.
o Smart Territories: covering segments such as smart precision agriculture,
  environment protection and rural towns & areas, etc.

Conversely, and as expected, revenue earned from historic and alternative
telecom operators continued to decline, to EUR452k in Q3 2020 (-35%
year-on-year).

Service revenue held steady, however, accounting for 28% of the Q3 2020 product
mix.

10% international growth year-on-year

Revenue by
geographic region            Q3    Q3            At 30     At 30
In thousands of euros      2020   2019 Change  September September Change
                                                  2020      2019

NCSA (Americas)             140      98   +43%     263     210     +26%
APAC (Asia-Pacific)         210     287   -27%     553     629     -12%
EMEA excl. France         1,053     892   +18%   2,880   2,878       0%
International             1,403   1,277   +10%   3,696   3,717    -0.5%
France                    1,318   1,650   -20%   3,791   5,672     -33%
Total                     2,721   2,927    -7%   7,487   9,389     -20%

Europe-Middle East-Africa and North/South America delivered robust growth,
reflecting the commercial transformation implemented in these regions
specifically targeting private operators. The Asia-Pacific region struggled
once again under the weight of health restriction measures. That said, it has
lost none of its considerable potential.

Overall, the Group was able to catch up in terms of business activity in Q3
2020 to generate stable international revenue over the first nine months of the
financial year.

The impact of the health crisis was more substantial in France, which saw
cumulative business decline by one-third at 30 September. In Q3 alone, revenue
posted a less significant downturn, however (-20% year-on-year), and sales
picked up among private network operators, now a priority segment in Kerlink's
development.

Structural momentum: uncertainties surrounding the persistence of the health
crisis

To capitalise on the progress achieved in Q3 2020, the Group plans to continue
the commercial efforts undertaken year-to-date. The stricter health
requirements imposed as of late are expected to stimulate the roll-out of IoT
projects in the areas of employee protection in the workplace (personal
protective measures, contact tracing, social distancing), building sanitisation
controls, process automation and remote equipment supervision.

Kerlink also plans to step up efforts to promote its Universal Contact
TracingTM solution to fight the spread of the Covid-19 epidemic in the
workplace. The deployment of this contact tracing solution, which does not rely
on the use of GPS or smartphones and protects personal data confidentiality, is
easy to implement and thus boasts significant development potential in these
unique circumstances.

Drawing on a secure financial position and a well-managed cost structure,
Kerlink is confident as ever in its ability to weather the crisis and move
forward with the implementation of its strategy to restore sustainable momentum
once things are back to normal.

About Kerlink

Kerlink Group is a leading global provider of connectivity solutions for
designing, launching, and operating public & private Internet of Things
networks. Its comprehensive product portfolio includes industrial-grade network
equipment, best-of-breed network core, operations and management software,
value-added applications and expert professional services, backed by strong R&D
capabilities. Kerlink specializes in enabling future-proof intelligent IoT
connectivity for three major domains: Smart Cities - metering, parking, street
lighting, waste management, air quality & pollution, building & facilities,
assets monitoring... -, Smart Industries - fleet & asset tracking, energy &
utilities, oil, gas & mining, airports, harbors, infrastructures,
manufacturing, retail,...- and Smart Territories - precision agriculture,
environment protection and rural towns & areas -. More than 120,000 Kerlink
installations have been rolled out with more than 330 clients in 69 countries.
Based in France, with subsidiaries in the US, Singapore, India, and Japan,
Kerlink is a founding and board member of the LoRa Alliance(r) and the uCIFI
Alliance(tm). It is listed on Euronext Growth Paris under the symbol ALKLK.

For more information, visit www.kerlink.com/ or follow us on Twitter
@kerlink_news.

                                Upcoming events

                              2020 Annual Results
                     11 February 2021, after market close

                               www.kerlink.com

Investors contact :
Actifin
Benjamin Lehari
+33 (0)1 56 88 11 25
blehari@actifin.fr

Financial press contact :
Actifin
Isabelle Dray
+33 (0)1 56 88 11 29
idray@actifin.fr

Kerlink press & market analysts
Mahoney Lyle
Sarah Lyle
+33 (0)6 75 85 60 42
slyle@mahoneylyle.com

www.kerlink.com  Linkedin kerlink  Twitter@kerlink_news  You Tube kerlink

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